Firms across Asia Pacific are willing to pay a premium to operate in more sustainable buildings a new study has concluded.
Professional services firm JLL undertook a wide ranging study of corporations across the region and found a large majority would pay more for greener space.
The study found 70% of corporations A are willing to pay a rental premium to lease sustainability-certified buildings in the future.
The finding matched broader real estate sustainability developments across Asia Pacific where 40% of corporate occupiers have already adopted net zero targets and another 40% are planning to adopt targets by 2025. The regional real estate decarbonization drive is also prompting 80% of corporate occupiers to prioritise locations that help them reduce carbon emissions, while 65% of investors will focus more on green building investments.
“For companies operating in Asia Pacific, any meaningful reduction in carbon footprint is tied directly to real estate. Corporate occupiers will increasingly demand real estate solutions that complement their sustainability agenda. This will lead investors to prioritise green investments, propelling the real estate industry transformation towards future-ready green buildings,” said Anthony Couse, Chief Executive Officer, APAC, JLL.
The report, “Sustainable Real Estate: From ambitions to actions” surveyed over 550 corporate real estate leaders. Approximately 90% of companies in Asia Pacific said they agreed that tackling emissions from real estate is essential in achieving a net zero carbon agenda.
JLL said the findings signalled a new era in regional real estate portfolio leasing and investment. For corporate occupiers who currently lease space in a green building, the majority are paying a rental premium of 7-10%, providing a benchmark for future sustainable leasing trends, according to JLL.
“While firmer commitments from companies are necessary to accelerate the net-zero carbon ambitions, organisations have identified several barriers in achieving their sustainable real estate goals,” said the study. “Approximately 70% of occupiers report a lack of incentives from governments and support from landlords. Additionally, three out of four companies surveyed identified insufficient technological infrastructure as a hurdle to reaching their environmental goals.”
Roddy Allan, Chief Research Officer, JLL Asia Pacific, added: “Across Asia Pacific, society is shifting towards an emphasis on green and sustainable spaces in a bid to address the concerns on climate risk, and companies are willing to pay a premium to meet new demands. There is now a heightened responsibility among businesses to take demonstrable actions with their commercial real estate portfolio, which will increasingly rely on partnership between occupiers and investors to translate sustainability ambitions into actions.”
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